This document provides an overview of startup investing and a 10-step process for great startup investing. It discusses developing an investment thesis and persona, becoming a domain expert, building networks, evaluating startups, negotiating deals, and following up with portfolio companies. The presentation also profiles Edith Yeung, a partner at 500 Startups Greater China, and provides her contact information.
17. Seven Questions All Investors Should Ask
1.⯠Why do you want to invest in
startups and why now?
2.⯠Do you want to invest in:
â⯠Stages
â⯠Locations
â⯠Sectors
3.⯠How many investments you want
to make per year?
4.⯠What is your average check size?
5.⯠How soon do you want return?
6.⯠What is your expected return?
7.⯠Do you want to be a professional
investor or an angel investor?
19. Step 2 - Branding 101 for Investors
â˘âŻWhat is your unique value position?
â˘âŻAre you a professional investor or an angel?
â˘âŻWhy you:
ââŻBackground (your story)
ââŻTrack records (investment return, exits)
ââŻSpecial network (schools, companies or markets)
ââŻSpecial access (customers and partners)
ââŻSpecial knowledge (government policy)
â˘âŻWho are your team members (special partners and
advisors)
20.
21. Edith YeungSelected by Inc's Magazine as one of the Silicon Valleyâs investors
you must know, Edith Yeung is the head of 500 Startups
Greater China and partner of 500 Mobile Collective Fund.
Edith invested in over 40 mobile, VR, AR, AI and machine
learning startups, including Hooked - #1 reading app for
millennium, DayDayCook - #1 Asian Cooking media and
platform, Fleksy (acquired by Pinterest), Human (acquired
by Mapbox), AISense, and many more. Before 500, Edith
was the head of marketing for Dolphin Browser, a Sequoia-
backed mobile browser with over 150 million installs
worldwide. Edith also worked with many Fortune 500
companies such as Siebel, AMS, AT&T Wireless and
Autodesk.
Edith Yeung | @edithyeung | edith.co
29. Step 5 â Build Your
â˘âŻ Investment partners
â˘âŻ Fellow investors
â˘âŻ Industry experts
â˘âŻ Your portfolio CEOs
â˘âŻ Or your mom?
30. Step 6 â How to Evaluate a Startup?
â˘âŻFounder
â˘âŻTraction
â˘âŻStage
â˘âŻLocation
â˘âŻValuation
â˘âŻIndustry
31. Should I Invest in This?
â˘âŻWhat: Next generation car service mobile app
â˘âŻFounders: Joe has previous exits, but has no experience with
car service business
â˘âŻTraction:
ââŻWebsite reserved
ââŻiPhone app development in progress. Demo coming soon
ââŻProvisional patent filed
ââŻGot 15 customers
46. WeChat is the #1 Most Frequently Used App in
China WeChat is Facebook,
WhatsApp, Paypal, Slack and
Tinder combined. WeChat by the
numbers:
â⯠App is used by 79.6% of
the internet population in
China
â⯠889 million monthly active
users
â⯠10 million official accounts
(similar to Facebook
Business page)
â⯠200,000 WeChat
developers
â⯠194 - average number of
WeChat contacts per users
Source
Â
 -Ââ
 h*ps://cnnic.com.cn/IDR/ReportDownloads/201706/P020170608523740585924.pdf
Â
h*ps://chinachannel.co/1017-Ââwechat-Ââreport-Ââusers/
Â
Â
47. WeChat has ~938 Million Monthly Active Users
and over 600 Million Average Daily Payment
Transactions
Source:
 h*ps://blog.ycombinator.com/lessons-Ââfrom-Ââwechat/
Â
h*ps://www.cnbc.com/2017/05/31/wechat-Ââcaptures-Ââabout-Ââ30-Ââpercent-Ââof-Ââchinas-Ââmobile-Ââapp-Ââusage-Ââmeeker-Ââreport.html
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50. China is the #1 Mobile Payment Market in the World.
Alipay is the #1 Third-Party Online Payment Market with
54.1% Market Share
Started in 2004, Alipay was built by Alibaba
to support Taobao (eBay of China) and
temporarily hold money for the seller until
the buyer confirms that the product was
received in good condition. Alipay by the
numbers:
â˘âŻ $5.5 trillion mobile payments sector
(50X bigger than US market)
â˘âŻ Alibaba had a 54% market share in Q4
2016 compared to 71% in Q3 2015
â˘âŻ WeChat pay had 37% market share in
Q4 2016 compared to 16% in Q3 2015
â˘âŻ 463 million people use mobile payment
even when they are shopping offline
â˘âŻ Mobile payment users expected to
reach 630 million by 2020
Source
 h*p://technode.com/2017/04/07/alipay-Ââleads-Ââchinas-Ââthird-Ââparty-Ââmobile-Ââpayment-Ââmarket-Ââin-Ââq4-Ââ2016/
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h*ps://www.L.com/content/e3477778-Ââ2969-Ââ11e7-Ââbc4b-Ââ5528796fe35c
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The
 40th
 China
 StaOsOcal
 Report
 on
 Internet
 Development
 -Ââ
 www.cnnic.cn/hlwfzyj/hlwxzbg/hlwtjbg/201708/P020170807351923262153.pdf
Â
h*ps://www.bloomberg.com/news/arOcles/2017-Ââ02-Ââ23/pboc-Ââis-Ââgoing-Ââdigital-Ââas-Ââmobile-Ââpayments-Ââboom-Ââtransforms-Ââeconomy
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51. WeChat Pay is the Biggest Threat to
Alibaba, Ants Financials and Alipay
54. Cryptocurrency â China was the Worldâs Largest
Cryptocurrency Market Before September 11
Source:
 Goldman
 Sachs
 CHINA
 E
 +
 COMMERCE
 Shopping
 Re-ÂâImagined
Â
h*ps://www.emarketer.com/ArOcle/Average-ÂâSpending-Ââof-ÂâChinas-ÂâOnline-ÂâShoppers-ÂâTop-Ââ1800-Ââ2017/1015731
Â
Â
h*ps://futurism.com/china-Ââto-Ââstart-Ââusing-Ââblockchain-Ââto-Ââcollect-Ââtaxes-Ââand-Ââsend-Ââinvoices/
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55. NEO (Ethereum of China) Reached $1.4 billion
Market Cap in August 2017
Source:
 Goldman
 Sachs
 CHINA
 E
 +
 COMMERCE
 Shopping
 Re-ÂâImagined
Â
h*ps://www.emarketer.com/ArOcle/Average-ÂâSpending-Ââof-ÂâChinas-ÂâOnline-ÂâShoppers-ÂâTop-Ââ1800-Ââ2017/1015731
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h*ps://futurism.com/china-Ââto-Ââstart-Ââusing-Ââblockchain-Ââto-Ââcollect-Ââtaxes-Ââand-Ââsend-Ââinvoices/
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58. Shopping â China is the Worldâs Largest
eCommerce Market. $1.7 Trillion Market by 2020
eCommerce by the numbers:
â˘âŻ 75% of 467 million online
shoppers are millennials
â˘âŻ 200 million more online
shoppers coming from lower tier
cities and rural China
â˘âŻ Average spending 12,198 RMB
($1,836 USD) in 2017
â˘âŻ Over 200 cities in China have
same-day or next-day delivery
coverage by Cainiao and JD
â˘âŻ $1.8 trillion RMB online FMCG
market size by 2020
â˘âŻ 4 million express delivery
personnel by 2020 and 1 million
food takeout delivery staff
Source:
 Goldman
 Sachs
 CHINA
 E
 +
 COMMERCE
 Shopping
 Re-ÂâImagined
Â
h*ps://www.emarketer.com/ArOcle/Average-ÂâSpending-Ââof-ÂâChinas-ÂâOnline-ÂâShoppers-ÂâTop-Ââ1800-Ââ2017/1015731
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59. Internet Celebrity (ç˝çş˘) Economy. Meet ĺš´ ĺŚ
ĺŚ (Rice Cake Mama). Monthly GMV $1.2M.
WeChat followers 7 million
Source:
 h*ps://36kr.com/p/5049432.htmll
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60. Alibaba Goes Offline. Testing Cashless Alipay
Only Grocery Store in Shanghai. 30 minutes
Delivery Within 3 km. $37 Million GMV in 2016.
Source:
 h*ps://baike.baidu.com/item/%E7%9B%92%E9%A9%AC%E9%B2%9C%E7%94%9F/22035088?fr=aladdin
Â
61. Netease (ç˝ć丼é) and Xiaomi (繳厜ćĺ) are
Creating New, Trusted Retail Brands with
Support of Growing Middle Class and
Homegrown Manufacture Plants
Source:
 h*ps://baike.baidu.com/item/%E7%9B%92%E9%A9%AC%E9%B2%9C%E7%94%9F/22035088?fr=aladdin
Â
64. Bike sharing â China is the #1 Bike-sharing
Country in the World with Over 106 Million Bike
Sharing App Users
Bike-sharing by the numbers:
â˘âŻ Annual users reach 106
million in 2017 and
expected to reach 198
million by 2021
Source
 h*ps://www.L.com/content/5efe95f6-Ââ0aeb-Ââ11e7-Ââ97d1-Ââ5e720a26771b
Â
h*ps://www.emarketer.com/ArOcle/Alibaba-ÂâTakes-ÂâSpin-ÂâChinas-ÂâGrowing-ÂâBike-ÂâSharing-ÂâEconomy/1016126?
ecid=NL1001&utm_content=buďŹer1dd3&utm_medium=social&utm_source=twi*er.com&utm_campaign=buďŹer
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The
 40th
 China
 StaOsOcal
 Report
 on
 Internet
 Development
 -Ââ
 www.cnnic.cn/hlwfzyj/hlwxzbg/hlwtjbg/201708/P020170807351923262153.pdf
Â
Top 5 bike-sharing companies
are:
â⯠Mobike
â⯠Ofo
â⯠BlueGoGo
â⯠Coolqil
â⯠Youon
65. In 1980, 63% of Chinese Commuters Cycled to
Work. In 2014, 11.9%. Chinese Traffic Authority
Wants to Increase this Ratio to 18% by 2020
Source
 h*p://www.chinanews.com/sh/2015/09-Ââ23/7538653.shtml
Â
67. Yes⌠You Can Make a Living Being a Live
Broadcaster (ç˝çş˘)
68. Live Streaming â Chinaâs Live Streaming Market
is Worth Minimum at $5 Billion in 2017
Source
 -Ââ
 h*p://www.caixinglobal.com/2017-Ââ06-Ââ19/101103241.html
Â
h*p://www.businesswire.com/news/home/20170509005380/en/Global-ÂâMarket-ÂâEsports-ÂâVideo-ÂâBooming-ÂâChina-ÂâLeading
Â
Â
â˘âŻ YY, 6.cn, Momo and Huaishou recorded in excess of a
combined 11 billion RMB in live video streaming revenue
â˘âŻ Top revenue streams are:
â⯠Sales of virtual items
â⯠Premium features
â⯠Online games
â⯠Advertising
69. Live Streaming Industry is Empowered by Zhai
Nan (ĺŽ çˇ). Over 235 Million Users on Live
Streaming. Many Lonely People in China
Chinaâs craze for personal live-streaming runs far deeper into
third-tier cities and remote rural areas where the internet is the
one and only fun and cheap place to hang out.
Â
Â
Zhai Nan ĺŽ çˇ- young men
who spend their lives chained
to their home computers,
surfing the Internet and playing
computer games. Theyâre
stereotyped as introverted and
socially awkward.
Source
 -Ââ
 h*ps://www.economist.com/news/special-Ââreport/21716461-Âânew-Ââway-Ââbringing-Ââcolour-Ââdreary-Ââlives-Ââchinas-Âânew-Ââcraze-Ââlive-Ââstreaming
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71. Chinese Love Playing games. Everybody is on
Their Phones While Taking Public Transportation
72. China is the Game Industry Capital of the World.
600 Million Gamers Generated $24.6 Billion in
2016
Source
 -Ââ
 h*ps://www.bloomberg.com/news/arOcles/2017-Ââ06-Ââ01/china-Ââjust-Ââbecame-Ââthe-Ââgames-Ââindustry-Ââcapital-Ââof-Ââthe-Ââworld
Â
h*ps://newzoo.com/insights/arOcles/the-Ââglobal-Ââgames-Ââmarket-Ââwill-Ââreach-Ââ108-Ââ9-Ââbillion-Ââin-Ââ2017-Ââwith-Ââmobile-Ââtaking-Ââ42/
Â
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73. Tencentâs Honour of Kings â 200 Million Players.
70 Million DAU. Generated $1 Billion in 2016
75. China is the Worldâs Largest eSports Market
with 220 Million Players
There will be 220 million
eSports players in China by
2017 with:
â˘âŻ Total revenue surged 52%
year-on-year to $50 billion
RMB ($7.3 billion USD) in
2016
â˘âŻ 11.1 billion eSport video
streams delivered in 2016
â˘âŻ League of Legends Pro
League attracted 5 billion
viewers in 2016
Source
 -Ââ
 h*p://www.caixinglobal.com/2017-Ââ06-Ââ19/101103241.html
Â
h*p://www.businesswire.com/news/home/20170509005380/en/Global-ÂâMarket-ÂâEsports-ÂâVideo-ÂâBooming-ÂâChina-ÂâLeading
Â
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76. Li "iceice" Peng - #1 eSport Player in China
Made ~$2 million from Playing Dota 2
Source
 -Ââ
 h*ps://www.esportsearnings.com/players/highest-Ââoverall
Â
Â
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79. China Wants to be the World Leader in Artificial
Intelligence by 2030. From AlphaGo to Robots
for Kids, Restaurants and Sports
80. Artificial Intelligence (AI) â China Invested $2.6
Billion in AI Startups in 2016. AI Market will
Reach $9.1 Billion USD by 2020
Source
 h*p://www.scmp.com/news/china/society/arOcle/2100427/chinas-Ââai-ÂârevoluOon-Ââand-Ââhow-Ââits-Âârivalling-Ââus
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Company Sector Amount
Raised
Investors
Sensetime Deep learning $410M CDH Investments, IDG Capital Partners,
Morningside, TCL Capital, WANDA Group
Mobvoi Voice AI $251.62 Volkswagen, Google, SIG China
ICarbonX Health AI $199.48M China Bridge Capital, Tencent
Face++ Computer
vision
$147M Foxconn, Qiming, Sinovation
Ubtech Robotics $120M CDH, CITIC, Qiming
Roobo Robotics $100M Iflytek
Unisound Voice AI $66.33M Qiming
Yitu Computer
vision
$55M Banyan, Hillhouse, Sequioa, Zhenfund
AISpeech Voice AI $45M DCM, Legend Star, Alibaba
82. Most Chinese Parents Would Rather Not Eat, but
Spend 40-50% of Their Income on Education for
Their Kids
83. China is the Worldâs Largest Education Market.
Online Education Users Reach 144 Million
Source
 -Ââ
 Golden
 Age
 of
 China's
 EducaOon
 Industry
 Seize
 the
 Momentum
 by
 Deloi*e
Â
The
 40th
 China
 StaOsOcal
 Report
 on
 Internet
 Development
 -Ââ
 www.cnnic.cn/hlwfzyj/hlwxzbg/hlwtjbg/201708/P020170807351923262153.pdf
Â
84. China Also Has More University Students Than
the EU and the US Combined
Source
 â
 China
 NaOonal
 Bureau
 of
 StaOsOcs
Â
h*ps://www.weforum.org/agenda/2016/12/the-Ââworld-Ââs-Ââtop-Ââeconomy-Ââthe-Ââus-Ââvs-Ââchina-Ââin-ÂâďŹve-Ââcharts/
Â
Â
85. VIPKid, ABC360, VIPABC are Video
Conferencing Platforms Connecting English
Speakers with Kids for 1-1 Language Lessons